AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated as
of February 9, 1997, among TheraTx, Incorporated a Delaware corporation (the
"Company"), Vencor, Inc., a Delaware corporation ("Purchaser"), and Peach
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Purchaser ("Merger Sub"), the Company and Merger Sub sometimes being
hereinafter collectively referred to as the "Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the Company each have
unanimously approved of this Agreement, the Offer (as defined herein) and the
Merger (as defined herein) and determined that it is in the best interests of
their respective companies and stockholders for Purchaser to acquire the
Company upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Company, Purchaser and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the representation,
warranties, covenants and agreements contained herein the parties hereto
hereby agree as follows:
ARTICLE I
THE TENDER OFFER
1.1. Tender Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article IX hereof and none of the events set forth in Annex A
hereto shall have occurred or be existing, within five business days of the
date hereof, Merger Sub will commence a tender offer (the "Offer") for all of
the outstanding shares of Common Stock, par value $0.001 per share of the
Company (the "Shares"), together with the associated rights to purchase (the
"Rights") Series A Junior Participating Preferred Stock of the Company (the
"Series A Preferred") at a price of $17.10 per Share in cash, net to the
seller, subject only to the conditions set forth in Annex A hereto. Subject to
the terms and conditions of the Offer, Purchaser will promptly pay for all
Shares duly tendered. The Company's Board of Directors shall recommend
acceptance of the Offer to its stockholders in a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to be filed with the
Securities and Exchange Commission (the "SEC") upon commencement of the Offer.
(b) Purchaser agrees, as to the Offer to Purchase and related Letter of
Transmittal (which together constitute the "Offer Documents") and the Company
agrees, as to the Schedule 14D-9, that such documents shall, in all material
respects, comply with the requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations thereunder and
other applicable laws. The Company and its counsel, as to the Offer Documents,
and Merger Sub and its counsel, as to the Schedule 14D-9, shall be given an
opportunity to review such documents prior to their being filed with the SEC.
(c) In connection with the Offer, the Company will cause its Transfer Agent
to furnish promptly to Merger Sub a list, as of a recent date, of the record
holders of Shares and their addresses, as well as mailing labels containing
the names and addresses of all record holders of Shares and lists of security
positions of Shares held in stock depositories. The Company will furnish
Merger Sub with such additional information (including, but not limited to,
updated lists of holders of Shares and their addresses, mailing labels and
lists of security positions) and such other assistance as Purchaser or Merger
Sub or their agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares.
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ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 2.3) Merger Sub shall be merged with
and into the Company and the separate corporate existence of Merger Sub shall
thereupon cease (the "Merger"). The Company shall be the surviving corporation
in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger, except as set forth in Section 3.1. The Merger shall
have the effects specified in the Delaware General Corporation Law
(the "DGCL").
2.2. Closing. The closing of the Merger (the "Closing") shall take place (i)
at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at
10:00 A.M. on the first business day on which the last to be fulfilled or
waived of the conditions set forth in Article VIII hereof shall be fulfilled
or waived in accordance with this Agreement or (ii) at such other place and
time and/or on such other date as the Company and Purchaser may agree.
2.3. Effective Time. As soon as practicable following the Closing, and
provided that this Agreement has not been terminated or abandoned pursuant to
Article IX hereof, the Company and the Purchaser will cause a Certificate of
Merger (the "Delaware Certificate of Merger") to be executed and filed with
the Secretary of State of Delaware as provided in Section 251 of the DGCL (or,
if permitted, Section 253 of the DGCL). The Merger shall become effective on
the date on which the Delaware Certificate of Merger has been duly filed with
the Secretary of State of Delaware, and such time is hereinafter referred to
as the "Effective Time."
ARTICLE III
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
3.1. The Certificate of Incorporation. The Certificate of Incorporation of
the Company (the "Certificate") in effect at the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation, until duly amended
in accordance with the terms thereof and the DGCL, except that Article IV
of the Certificate shall be amended to read in its entirety as follows unless
the event contemplated by Section 7.14(iii) shall have occurred, in which case
Article IV of the Certificate shall not be amended at the Effective Time:
"The aggregate number of shares which the Corporation shall
have the authority to issue is 1,000 shares of Common Stock,
par value $0.001 per share."
3.2. The Bylaws. The Bylaws of Merger Sub in effect at the Effective Time
shall be the Bylaws of the Surviving Corporation, until duly amended in
accordance with the terms thereof and the DGCL.
ARTICLE IV
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
4.1. Officers and Directors. The directors of Merger Sub and the officers of
the Company at the Effective Time shall, from and after the Effective Time, be
the directors and officers, respectively, of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
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4.2. Board of Directors; Committees.
(a) If requested by Purchaser, the Company will, promptly following the
purchase by Merger Sub of Shares pursuant to the Offer, take all actions
necessary to cause persons
designated by Purchaser to become directors of the Company so that the total
number of such persons equals that number of directors, rounded up to the next
whole number, which represents the product of (x) the total number of
directors on the board of directors of the Company (the "Board of Directors")
multiplied by (y) the percentage that the number of Shares so accepted for
payment plus any Shares beneficially owned by Purchaser or its affiliates on
the date hereof bears to the number of Shares outstanding at the time of such
acceptance for payment. In furtherance thereof, the Company will increase the
size of the Board of Directors, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Purchaser's
designees to be elected to the Board of Directors; provided, however, that
prior to the Effective Time, the Board of Directors shall always have at least
two members who are neither officers of Purchaser nor designees, shareholders
or affiliates of Purchaser ("Purchaser Insiders"). At such time, the Company,
if so requested, will use its reasonable efforts to cause persons designated
by Purchaser to constitute the same percentage of each committee of the Board
of Directors, each board of directors of each subsidiary of the Company and
each committee of each such board (in each case to the extent of the Company's
ability to elect such persons). The Company's obligations to appoint designees
to the Board of Directors shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its obligations
under this Section 4.2 and shall include in the Schedule 14D-9 such
information as is required under such Section and Schedule.
4.3. Actions by Directors. For purposes of Article IX and Sections 10.3 and
10.4, no action taken by the Board of Directors prior to the Merger shall be
effective unless such action is approved by the affirmative vote of at least a
majority of the directors of the Company who are not Purchaser Insiders.
ARTICLE V
CONVERSION OR CANCELLATION OF SHARES IN THE MERGER
5.1. Conversion or Cancellation of Shares. The manner of converting or
canceling shares of the Company and Merger Sub in the Merger shall be as
follows:
(a) At the Effective Time, each Share issued and outstanding immediately
prior to the Effective Time (other than Shares owned by Purchaser, Merger Sub
or any other subsidiary of Purchaser (collectively, the "Purchaser Companies")
or Shares which are held by stockholders ("Dissenting Stockholders")
exercising appraisal rights pursuant to Section 262 of the DGCL) shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into the right to receive, without interest, an amount in cash
equal to $17.10 or such greater amount which may be paid pursuant to the Offer
(the "Merger Consideration"). All such Shares, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer be
outstanding and shall be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such Shares shall thereafter
cease to have any rights with respect to such Shares, except the right to
receive the Merger Consideration for such Shares upon the surrender of such
certificate in accordance with Section 5.2 or the right, if any, to receive
payment from the Surviving Corporation of the "fair value" of such Shares as
determined in accordance with Section 262 of the DGCL.
(b) At the Effective Time, each Share issued and outstanding at the
Effective Time and owned by any of the Purchaser Companies, and each Share
issued and held at the Effective Time in the Company's treasury, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(c) At the Effective Time, each share of Common Stock, par value $0.25 per
share of Merger Sub issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
Merger Sub or the holders of such shares, be converted into one Share.
5.2. Payment for Shares. Purchaser shall make available or cause to be made
available to a bank or trust company appointed by Purchaser with the Company's
prior approval (the "Paying Agent") amounts sufficient
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